Cable Would Tweak Rural-TV Loan Bill

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Washington-The cable industry wants to remove or at least soften a provision in a House bill that would limit the industry's ability to qualify for loans designed to promote rural access to local TV signals.

The House bill (H.R. 3615), approved 375-37 on April 13, would provide up to $1.25 billion in federal loan guarantees, but only up to 80 percent of a loan.

The Senate passed similar legislation (S. 2097)-$1.25 billion in guarantees, with the same 80 percent backing-on March 30, with some key differences.

The bills are headed to a House-Senate conference committee, which will draft a single version that would return to both chambers for final passage before advancing to the White House.

During that stage, cable-industry lobbyists will target a provision added by Rep. Edward Markey (D-Mass.) of the House Telecommunications Subcommittee on March 23.

Markey's amendment would prevent loans from flowing to cable operators "for the extension of any cable system to any area or areas for which the cable operator has a cable franchise, if such franchise obligates the operator to extend such system to such area or areas."

Markey fused that prohibition to another that would bar loans for "upgrading or enhancement" of cable systems unless the money is used to extend service beyond the franchise area.

National Cable Television Association spokesman David Beckwith said the industry would like to see the provision removed to preserve the bill's ostensible platform neutrality.

"It seems to infringe on assurances that this bill will be technology neutral," Beckwith said.

One cable lobbyist said it was unclear if the Markey amendment can be altered or removed. But the effort might ultimately be worthless, because lawmakers that support the bill expect the loan guarantees to go to the direct-broadcast satellite industry.

"We are under no illusion that cable operators are going to get the lion's share of this money," Beckwith said. "There is no doubt about it-it's a DBS-oriented bill."

The House and Senate were in recess last week. The Senate returns on April 25; the House on May 2.

In the cable industry's favor, the Senate did not adopt a provision similar to Markey's.

Were the Markey amendment to become law, its impact would largely depend on the requirements of a franchise agreement, said Matt Polka, president of the American Cable Association, a trade group representing 300 small operators serving 3.2 million subscribers. Many small operators are not required to build out an entire franchise area if household density is too low, he explained.

Markey's amendment would not stop a cable operator from using loans to reach into areas beyond its franchise, Polka said. That's consistent with the aim of providing local TV signals to people who can't get them today, he said.

"I am not disappointed with the process," Polka said. "I feel comfortable with where Mr. Markey is."

Still, Polka was concerned that Markey's amendment might limit small cable operator participation in the loan program.

"Certainly, it does potentially create some questions," Polka said. "Can we do more to it? Yeah."

While the DBS industry is expected to benefit under the law, the industry's trade association is unhappy with the House bill after an amendment adopted by the Commerce Committee was deleted from the lower chamber's version.

The amendment, sponsored by Rep. Mike Oxley (R-Ohio) directed the Federal Communications Commission to use a third party to conduct tests to ensure that Northpoint Technology Ltd.-which proposes to share DBS spectrum to offer terrestrial-video service-would not cause harmful interference to DBS carriers.

"We were disappointed about that, but the decision to remove the Northpoint amendment was a parliamentary process. It wasn't a judgment of the House on the substance of the Oxley amendment," said James Ashurst, spokesman for the Satellite Broadcasting and Communications Association.

The conference committee has at least three more discrepancies to iron out.

The House bill includes a provision on must-carry that would allow a loan guarantee recipient to provide fewer than all local-TV signals in a market. The carriage obligation requires the DBS provider to carry as many local-TV signals as the largest cable system in each market. The Senate bill does not contain the same provision.

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